REAL ESTATE NEWS

Berkeley Landlord Files Class-Action Lawsuit Against Measure MM

Law requiring annual registration fees was extended to 5,000 units in 2020.
A Berkeley landlord has filed a class-action lawsuit claiming the city's law requiring annual apartment registration fees violates the state's constitution.

San Francisco-based Alan Wofsy & Associates, a fine arts publishing company that owns an apartment complex in Berkeley, filed the lawsuit challenging the law, known as Measure MM, the San Francisco Business Times reported.

The lawsuit, which was filed in Alameda County Superior on September 11, is seeking an injunction on the collection of Measure MM fees, as well as unspecified damages and a refund of all fees paid by landlords under the law since it was enacted in 2020.

Berkeley had required the landlords of rent-controlled apartments to pay the annual per-unit fees prior to 2020. A voter-approved measure amended the city's rent-control ordinance to add up to 5,000 units that had been exempted from the fee requirement, including single-family homes, condominiums and apartments built after June 30, 1980.

The law requires landlords of these units to pay $150 per unit for FY 2021-2022 and FY 2022-2023, and $178 per unit moving forward.

Measure MM also bars evictions of Berkeley tenants for nonpayment during states of emergency and limited a rent-control exemption for accessory dwelling units, also known as Granny flats, unless the units are the only one on the property of an owner-occupied single-family home.

Owners of apartments exempted by Measure MM, including units owned by nonprofits and units leased to Section 8 tenants, don't have to pay the fees. Owners of affordable housing units not qualified for exemptions pay $37 per year.

The lawsuit argues that the fees are unreasonable and more than what is needed by the city to cover the cost of Measure MM, which the lawsuit alleges is a violation of California's constitution.

It says the class-action lawsuit has been filed on behalf of "hundreds, if not thousands" of property owners who have been required to pay the fees, the Business Times reported.

Wofsy owns Hearst Commons, a 26-unit rental property in Northwest Berkeley. None of the units is larger than 400 SF and, according to the a website for the property, were rented for between $1,375 and $1,600 as of 2021. Wofsy also owns some properties in Oakland.


Source: GlobeSt/ALM